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Why WhatsApp Payment Roll Out is Delayed

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There have been some recent developments in the WhatsApp Payment system in India. Read on to know more about the WhatsApp building systems to store payments data in India…

Recently, mobile messaging platform WhatsApp it has built a system that stores payments-related data in India, in line with Reserve Bank of India’s (RBI) data localization policy. The RBI in a circular in April this year, had said all system providers will have to ensure that the entire data relating to payment systems operated by them are stored in a system only in India. It had given time till October 15 to comply with the mandate.

Compliance
WhatsApp, which has 200 million users in the country, is the first major global player that has officially announced its compliance with the RBI directions before the deadline of October 15. WhatsApp spokesperson said in a e-mailed statement that “In response to India’s payments data circular, we’ve built a system that stores payments-related data locally in India,”. The move assumes significance amid the industry being divided over the RBI asking all payment system providers to ensure that data relating to systems operated by them is stored only in India.

WhatsApp spokesperson said in a statement that “In response to India’s payments data circular, we’ve built a system that stores payments-related data locally in India,”. The spokesperson further said WhatsApp hopes to expand the payments feature across India soon, so that it can “contribute to the country’s financial inclusion goals”. WhatsApp — which began piloting its payments service in India earlier this year — said almost one million people in the country are currently “testing” the feature.

Government Policies
This week, Finance Minister Arun Jaitley had met RBI Deputy Governor B P Kanungo to discuss the data localization norm for global financial technology companies. The meeting had been attended by Economic Affairs Secretary Subhash Chandra Garg, Financial Services Secretary Rajiv Kumar and IT Secretary Ajay Prakash Sawhney.

Vendor’s Response
The data localization mandate by RBI had drawn mixed response from the Industry. Domestic payment companies like Paytm and PhonePe welcoming the decision, while their global counterparts like Google which offers Google Pay in India have backed free flow of data. At the same time, some international players have sought more time and also asked that they be allowed to mirror the data. According to a government source, Internet based company Google, is said to have agreed to follow the RBI’s local data storage norm for payment services but wants time until December this year to comply with the rules.

Besides this, nearly ten International associations are believed to have recently drafted a joint letter flagging concerns with some of the proposed clauses of even the personal data protection bill, which too mandates local storage of certain types of data. These industry bodies are said to be of the view that data localization proposed in the draft bill could have “significant negative effects” on the ability of companies to do business in India.

Fake News
Meanwhile, WhatsApp, which has drawn flak from the government for circulation of fake news on its platform, has been testing its payments services in India for a few months now. India is the largest market for WhatsApp with the country accounting for over 200 million of its total 1.3 billion user base.

The government has already sent two notices to WhatsApp on the fake news circulation issue, following which the company has taken a number of steps to curb the menace. These include restricting the number of forwards that can be sent in one go, forward labels to highlight such messages and appointment of a grievance officer for India.

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